Research finds USPS, four other postal agencies saddled with large
legacy costs

March 19, 2013 07:00 AM Eastern Daylight Time

ARLINGTON, Va.--(BUSINESS WIRE)--Faced with a nearly 50-billion piece decline in global mail volume over
the past three years, rising employee pension costs and increasing
competition from private, commercial postal operators, the world’s
postal agencies are fighting back by diversifying services and
leveraging technology, according to a new
study from Accenture
(NYSE:ACN).

Achieving High Performance in the Postal Industry: Accenture Research
and Insights 2013 identifies two new trends for the industry:
digital mail has not reinvigorated postal agencies as originally
expected and private postal operators have become more aggressive,
creating greater competition for postal agencies in both the mail and
parcel business. Postal agencies in 24 countries and two commercial
companies – FedEx and United Parcel Service (UPS) – are included in the
study.

“Despite a continued tumultuous business climate, some postal
organizations are thriving. They are launching new business lines,
combining their products with new technology and radically changing
their cost structures to be leaner and more agile. As these posts
reinvent their business models, they are emerging as very different
organizations that are well positioned for future growth,” said Brody
Buhler, managing director for Accenture’s global postal industry
practice.

The 2013 research was presented at the European Postal Services
Conference here. The 16 largest postal agencies included in the research
represent nearly 75 percent of the world’s mail volume.

Since the publication of its first high performing posts report in 2006,
Accenture has conducted ongoing, in-depth research of the postal
industry. Using the Accenture High Performance Business methodology,
Accenture has reviewed and assessed the relative performance of postal
organizations. Starting with the postal systems of 16 countries and
extending that research to include 24 posts and two commercial companies
in 2013, the study gives a comprehensive review of what drives high
performance in postal agencies.

The 2013 research shows little movement since 2012 in the top 10 postal
agencies, with the exception of Norway, which jumped five positions to
seventh place and Finland, which dropped eight slots to 15th
place in the 2013 study. The top 10 highest performing posts, according
to the Accenture research, are Singapore Post, United Parcel Service
(UPS) (USA), Austria Post, Poste Italiane (Italy), Australia Post, FedEx
(USA), Posten Norge (Norway), bpost (Belgium), TNT (Netherlands) and
Correios Brasileiros (Brazil). According to the research, the bottom
five postal organizations are straddled with large legacy costs and
limited diversification, often due to regulatory or legislative
limitations: PostNord (Sweden and Denmark), Magyar Posta (Hungary),
Japan Post, Correos (Spain) and the U.S. Postal Service.

Top 10 High Performing Postal Agencies

Rank

2011

2012

1

Singapore

Singapore

2

Italy

UPS

3

UPS

Austria

4

Netherlands

Italy

5

Belgium

Australia

6

Austria

FedEx

7

Brazil and Finland

Norway

8

...

Belgium

9

FedEx

Netherlands

10

Australia/

Canada

Brazil

Source: Achieving High Performance in the Postal Industry: Accenture
Research and Insights 2013

Key Findings

Digital mail: No postal operator has seen real value or
positive financial impact from the expansion of digital mail. None of
the digital solutions currently in the market have resulted in
significant profit nor achieved broad adoption.

Parcels and logistics: Postal agencies, driven by continuing
eCommerce growth, have grown their parcel delivery capabilities and
diversified services to move into logistics to meet demand. This
growth also is creating more opportunities for private carriers.

Retail diversification: While some postal operators are
questioning how to leverage their retail outlets, high-performing
posts are branching out beyond stationery, office supplies and
greeting cards into convenience products that include bill payment
centers, motor vehicle registration, passports and other government
services.

Pricing and product innovation: Using technology to add value
to traditional mail and taking advantage of pricing flexibility are
having a positive impact on the industry, driving revenue growth an
average of 1.5 percent annually.

Cross-border eCommerce: Posts are starting to take advantage of
this new trend, expanding beyond domestic delivery to surrounding
countries and regions, and developing solutions for this new market

Consumer focus: Postal agencies are creating new services that
focus on the recipient – and not the sender – of mail, including
narrower windows of delivery or the ability to redirect a parcel
delivery to a new location. These services are giving consumers more
control over package deliveries and providing postal agencies with a
new revenue source.

Country Comparisons

Posts around the world are finding ways to gain traction in the
marketplace, transforming products with innovation and technology:

Canada Post Corp.’s new online service, Precision Targeter, is a
self-service tool that is used to prepare and send unaddressed
advertising mail.

Itella’s NetPosti, which sends digital scans of printed mail to its
customers in Finland, grew volume 700 percent between 2005 and 2010.

Correios Brasileiros (Brazil Post) partnered with Banco do Brasil to
provide financial services. Six thousand post offices are connected to
the internet and offer financial services.

U.S. Postal Service Every Door Direct Mail allows small businesses to
target mail by neighborhood, ZIP Code or city instead of specific
addresses. The program generated $153 million in new revenue in the
first eight months and is projected to reach $1 billion by 2016.

Australia Post leverages its 4,500 retail outlets across the country
by offering bill payments and passport applications, and accepts
payment for government services that include motor vehicle
registrations and fishing licenses.

bpost’s (Belgium) RelatioMail has increased the value of transactional
mail to consumers through redesign of the mail piece.

Methodology

Twenty six postal agencies and commercial logistics companies were
analyzed, including the U.S.-based, private-sector companies, FedEx and
United Parcel Service (UPS). “Achieving High Performance in the
Postal Industry: Accenture Research and Insights 2013” consists of
analysis based on 2012 publicly available information, content published
by the postal organizations and Accenture industry knowledge and
experience.

Accenture is a global management consulting, technology services and
outsourcing company, with 259,000 people serving clients in more than
120 countries. Combining unparalleled experience, comprehensive
capabilities across all industries and business functions, and extensive
research on the world’s most successful companies, Accenture
collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of US
$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.